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The Google Book Search settlement continues to draw critics, The New York Times reports. The Timesnotes a new challenge to the class action lawsuit settlement, which if approved by a federal court, will grant Google expansive digital publishing rights.

James Grimmelmann, an associate professor of the Institute for Information and Law at New York Law School and author of an ACS Issue Brief on the settlement, told The Times that the new filing "may be the most fundamental challenge to the settlement yet."

Scott Grant, a partner at the law firm Boies Schiller & Flexner, is preparing to lodge the filing in federal court today. Grant, who is preparing the filing on his own behalf, told the newspaper, "This is a predominantly commercial transaction and one that should be undertaken through the normal commercial process, which is negotiation and informed consent." He added that Google and supporters of the settlement are "trying to ram this through so that millions of copyright holders will have no idea that this happening."

In his Issue Brief, The Google Book Search Settlement: Ends, Means, and the Future of Books, Grimmelmann examined public interest concerns that have arisen from the settlement, such as who will control copyright ownership of "orphan works," which are books whose authors or rights holders cannot be found.

Grimmelmann asserts in his brief that dealing with "orphan works" is best solved by legislation, not litigation.

David Balto's reply to my Issue Brief on the proposed Google Book Search settlement is careful and thoughtful. Unfortunately, it gets some of its analysis of the settlement's anticompetitive effects wrong. I'll respond to three of the points on which I believe he's mistaken.

First, Balto's discussion of barriers to entry makes an unwarranted leap. He writes, "First, Google will affirmatively not obtain a monopoly over orphan works because the settlement does nothing to make entry more difficult for a second entrant."

He's right about making things more difficult, but wrong about the monopoly. The settlement gives Google a monopoly not by raising barriers for other entrants, but by preferentially lowering them for Google. The barriers to entry for the large-scale market in selling orphan works are currently prohibitive; no one at all can legally compete in it. The settlement opens it up only to Google; and the result will be a monopoly. (I was sloppy about my phrasing in the Issue Brief here -- I said the settlement "creates" a barrier to entry, which may be the source of Balto's more substantive error.)

Here's an analogy to make this distinction clear. Imagine that it were generally illegal to buy or sell milk. A company -- call it Moogle -- obtains from the government a special authorization to start selling milk. Moogle hasn't done anything to raise entry barriers for its competitors; the barriers were forbiddingly high to start with. But as a result of this special dispensation, Moogle now has the milk market all to itself. That's a monopoly.

This leads into a second way in which Balto's argument is questionable. He believes that Google's success in obtaining this settlement means that other potential book-scanners will be similarly able to obtain settlements authorizing them to sell books. He focuses on class certification, which he argues would be readily achievable for a hypothetical second scanner (let's call it "Two-gle"), once Google's precedent is on the books.

I have my doubts. There are serious grounds to question whether Two- gle's motion for class certification would be as trivial as Balto suggests. The Google case is already pushing at the limits of class action law. The parties are spending tens of millions of dollars in legal fees getting this class certified -- and that's with cooperative plaintiffs. Two-gle could quite plausibly face plaintiffs who like the Google deal well enough not to welcome competition. They could sabotage Two-gle's efforts in all sorts of ways: drafting idiosyncratic and fact-specific complaints, fighting any motion to force a class on them, or flatly refusing to negotate for the kind of settlement Google got.

Editor's Note: This substantial piece is a response to The Google Book Search Settlement: Ends, Means, and the Future of Books, an ACS Issue Brief by Professor James Grimmelmann. The complete reply is available below the fold.

In 2004, Google began working with large research libraries to digitize their book collections and to make the content searchable online. Not long after the project was announced, a collection of authors and publishers sued Google for copyright infringement. After almost three years of negotiations, Google and the plaintiffs announced in October 2008 that they had agreed to a proposed settlement.

While some commentators have lauded the settlement, others have vociferously claimed that it poses competitive concerns and does not promote the public interest. As an advocate for consumer interests and a former antitrust enforcer, I took great interest in this debate early on and started to study the settlement. Over the last few months, I have learned much about Google Book Search, the ensuing litigation, the settlement, and the settlement's competitive implications. In doing so, I have come to the firm conclusion that the competition criticisms of the settlement are unfounded. The settlement is good for consumers and should be approved.

The Google Books settlement, analyzed by Prof. James Grimmelmann in this ACS Issue Brief, continues to produce headlines.

By way of background, "In 2004, Google announced that it would create the largest library in the history of the world. The search company had signed up with major universities around the globe to scan and make searchable every word in every volume they contained," according to Slate. "When it was done, we'd be able to search through printed texts in the same way we search the Web. It was a lofty ambition, and it was quickly stopped short by a cold reality -- copyright law."

The Justice Department is examining antitrust issues regarding a proposed settlement of Google Book Search lawsuits with the search giant ....

It's unclear what might come of the reported talks, but the Justice Department is not to be treated lightly. The department leads enforcement of antitrust law, and Google backed down from its threatened antitrust lawsuit against it in 2008 regarding a search-ad partnership with Yahoo.

President Obama's first 100 days in office are drawing to a close; that means that there are only 1,361 policy-shopping days left until the next Inauguration. What should President Obama, the first Blackberry-using president, set as his technology agenda during that time?

One area ripe for change we can believe in is the laws that govern individual behavior on the Internet. The country is in the midst of a revolution in communications technology. The networked personal computer has given almost every individual the power of their own printing press, record press, film studio and radio tower, all with worldwide instantaneous distribution. And it's given those individuals the power not only to speak, but to listen - to anything, from any source, from anywhere in the world.

The laws that govern all this are struggling to keep up. Our copyright laws, electronic privacy laws and computer security laws were mostly passed in the technological Dark Ages -- twenty or thirty years ago. Those laws need to be brought up to date so that culture can be shared, copyright owners can get paid, reputations can be protected, and emails can be safe from snoops.

Legislators are busy people, and so far the response to the information revolution has been a series of quick fixes. But patchwork amendments are not enough; the hard work of revisiting the foundational assumptions underlying these laws cannot be postponed forever. Obviously an Administration with a major recession, two wars, health care reform and global warming on its plate can only accomplish so much. But President Obama has already shown that he is not deterred by the difficulty of a necessary task. He's also shown that he can shun easy fixes in favor of a careful, balanced approach, which is what's needed here.